Two Chinese college students in Oregon have been accused of scamming Apple out of hundreds of thousands of dollars, a report has found.
Yangyang Zhou and Quan Jiang have been accused of importing over thousands of counterfeit iPhones into the US from China as part of a scam that began in April 2017, according to the Oregonian.
They allegedly sent fake devices to Apple, complaining the phones wouldn’t turn on, and in exchange, both men received new iPhones through Apple’s warranty system.
Those new devices were then sent abroad and sold for hundreds of dollars, with both Zhou and Jiang receiving a cut of the profit, according to court documents.
According to the Oregonian, of the 3,069 warranty claims submitted by the two, Apple approved 1,493 replacements. The company estimated that it lost $895,000 (£689,000) as a result of the scam.
Both Zhou and Jiang were in the US on student visas, according to prosecutors.
Zhou, who completed his engineering studies at Oregon State University, shipped the fake devices into the US, while Jiang, a Linn Benton Community College student, allegedly dealt with Apple, by seeking the replacements either in person or online.
Once the real iPhones were sold in China, an associate paid Jiang’s mother, who then deposited the funds into her son’s bank account.
Customer officers began to have suspicions over shipments decorated with Apple logos, and by December 2017 had identified Jiang as one of the alleged smugglers.
Apple sent Jiang cease-and-desist letters after they identified him as one of the alleged smugglers, but the letters were ignored.
Zhou is charged with illegally exporting goods, and Jiang is accused of trafficking in counterfeit goods and of wire fraud.